Dave Concannon

A recent hacker news article about technology advocacy got me thinking about the Lean Startup philosophy, particularly the tenet of "platforms enabled by open source and free software".  To summarize briefly, Lean startups are built upon:

1. Agile development practices
2. Customer-centric rapid iteration (Customer Development)
3. The use of platforms enabled by open source and free software.

This last concept is something I want to dig into a little bit more. Is the success of a lean startup really dependent on all three of these elements?

Relevance of the Open Technology Stack

In what ways does an open or free software platform directly benefit a lean startup's success? Let's pretend that we clone a startup model; we have two startups each consisting of identical teams. Each of the teams has verified that a problem exists for a set of customers that have money and are willing to spend it to solve their problem. Each startup consists of:

1. Gifted technology implementers
2. An equally gifted team of customer development experts

We send them out to try to further validate any assumption about the customer problem, and they then set set out to build and rapidly iterate upon a technology solution that satisfies the minimum viable product.

Here's the kicker - Team one use open source technologies, Team two use a proprietary technology stack. Does success hinge upon the use of technology? Can an MVP delivered in a "locked-in" technology stack be as effective at solving the customer's problem as an open stack?  I would argue that given the same gifted technology team it will not have any negative effect on a startup and in some (albeit limited) cases, a locked-in technology stack may actually be of benefit to a startup. Here's that diagram redefined:

Lean Solutions

Here's the takeaway point - Technology is just a tool to solve some sort of problem. For a lean startup you can use any number of wonderful toys to implement your solution - the point is that you should spend your time and money as effectively as possible. Lean startups are low burn companies by design (slide #47).

Spending money effectively is the key point! Effective spending = a longer runway = more iterations = more learning = a higher chance of success. Paul Graham is very outspoken on the topic of more "enterprise" technology solutions as a reflection of the intelligence and ability of a startup team. He makes very salient points, though I can't agree with all of them. However, as mentioned previously there are instances where if you can ensure that a specific technology allows you to learn as effectively for the same cost, then a proprietary technology may actually be a competitive advantage (or at least, it won't be a disadvantage). One example is Enterprise sales.

Lean Startups and the Enterprise

Companies who have an employee base of tens of thousands tend to have been expertly sold on Enterprise solutions from companies like Oracle and SAP. It can provide safety and comfort for the CIO of an enterprise company to purchase from an established vendor such as this - the old adage of "Nobody ever got fired for buying IBM".  The end user of your product may only be one of several deciding parties, and could have relatively little say in the final decision for a potential sale. In many cases a sale hinges upon buy-in from a technology manager whose criteria is "How much of a headache will this product cause me if I need to to roll it out to 10,000 users?".  Choosing a technology stack that they already rely on may push a decision in your favor.

Technology Choice and Customer Development

As a final point, I believe that technology choice is a critical output of the customer development process. When defining the initial problem set for an enterprise customer, a startup needs to determine what existing platforms the economic buyer of a product has approved in the past and ensure at a minimum that technology choice isn't a disadvantage. "Crossing the chasm" and gaining adoption by the pragmatist / conservative mainstream will in part depend on how well your technology choice integrates with the customers existing platforms. New technologies can make some customers very nervous.

For consumer internet startups, technology choice is less of an issue as long as it can solve the problem effectively - focus on lean learning from actual customers over technology advocacy.

Edit: It's been pointed out to me that Eric Ries describes the "open source technology" point more definitively as 'Technology Commoditization" in a later explanation, so it seems we're on the same page. I think actually referring to "Open source technologies" has some benefits - it further facilitates the spread of the "lean startup" philosophy itself among technology enthusiasts.

Tribes is a manifesto for self-driven change for everyone tired of the status quo - A call to identify the problems in your company, town, or life and start solving them with a like-minded group of enthusiasts.

Seth has written a clear guide through what he describes as a "factory" mindset - Where a job is clearly defined and you do the same things every day in a predictable manner, with someone telling you what to do next. The reality he proposes is that the factory mindset when applied to real life is dangerous - dangerous for the individual who doesn't have the freedom to produce remarkable works with their talents, and dangerous for the company that lets great ideas stagnate due to poor policy.

The central principle of the book is that change is created by people - by leaders who are proud to go against the grain to do what they know is right. Movements are created by groups of these people, all working together at a singular aim without the fear and inertia that stifles innovation and talent.

I've dipped in and out of Seth's blog and always enjoyed it but never really 'drank the kool-aid'. No more - I found this book absolutely inspirational, and if you bump into me in the near future you may find me trying to force this book into your hand. Buy it, rent it, or steal it - this is something you need to read.

Keith Ferrazzi is a fanatical connector; someone who goes out of his way to meet new and interesting people. It's this rabid interest to connect with others, and subsequently introduce his connections to each other that he attributes a lot of his success.   In "Never Eat Alone", Mr Ferrazzi takes the reader through the mindset of some of the most powerful connectors on the planet, before gradually introducing some of the key concepts he uses to meet those he doesn't know.

Early in his career, Keith's ambition had turned him into 'a jerk' - Ignoring his peers, but going out of his way to catch the attention of his bosses. Eventually one of these bosses informed him that in order to succeed as a manager, you have to enable those around you to be successful. This simple advice the essence of his book - Do good work by allowing others to succeed.

Much of the advice reminds me of Dale Carnegie's "How to Win Friends and Influence People". He provides solid reasoning as to why you might want to follow his advice, clear examples of what to do (and what not to do), and case studies of famous super-connectors.

I really enjoyed this book, not only is it solid advice but it's clear that Mr Ferrazzi truly believes what he writes. Recommended!

Robert Scoble has an interesting post about Incentivizing social behaviour in your app. Coincidentally, during the week I was listening to Amy-Jo Kim's excellent Mixergy interview about Game Mechanics and wondering how the concepts could be applied in more 'serious' software. (Edit: Alan O'Rourke also directed me to this excellent presentation on the subject. Another great presentation by Amy-Jo Kim here.).

When I was still at college I spent an unhealthy amount of time playing MUD. This is like the text-driven grandfather of World of Warcraft or similar online games. Looking back, it looks like an antiquated relic - no graphics, grindingly slow, and you'd be randomly disconnected all the time; but it was as addictive as crack cocaine. Playing MUD became an obsession. My friends and I would try to cram in 10 minutes playing before lectures or exams, and often hang around the computer labs until we were kicked out.

Amy-Jo Kim nicely summarizes a lot of the essentials of Game Mechanics in her Mixergy interview so  instead of repeating them I'd advise you to go and listen to it. One fundamental concept she mentions several times is to create "Braggable Moments" for your users. We see this happening organically on a service like Twitter, where the 're-tweet' evolved as users wanted to share a quality tweet from another user. Being re-tweeted by a famous or popular user is the very essence of a Braggable Moment.

Scoble's blog post defines the sort of social mechanisms he sees for software such as FourSquare, but I see these applications as being designed specifically as games. I don't see them solving a particularly pressing pain point for a customer that can't already be solved in a more direct way - E.g. "Where are my friends? Well, I guess I'll ring them and ask."

Defining a "Braggable Moment"

I'm going to create a loose definition of a 'Braggable Moment' as a shared action which elevates an individual user in status among their peers. Akin to the "retweet" example from Twitter, we have the "like" button on Facebook. Someone "liking" your status update is something which adds kudos to the original poster's content, elevating the user's status. At it's most basic it's pandering to the user's ego, but if used correctly it can be used to encourage the types of behavior you need for your software to be successful.

Implementing Game Mechanics in 'Serious' Software

So how can similar addictive elements be utilized to make more serious software 'sticky'? Ebay has a leaderboard and a 'level' system for it's power sellers. Amazon has a 'top reviewers' leaderboard for people who have contributed the most reviews. In a very simple example which Max Klein describes humorously as Pavlovian conditioning, the bell sound added to lead conversion software was a very prominent braggable moment - When a lead converted into a sale, the salesperson's software made an audible sound to tell his peers that he had sold something. Furthermore, these sorts of features drive the users competitive nature - encouraging them to use the software more.

Implementation Ideas

1. Leaderboards - probably the most accessible method for enterprise software - Create a top ten list of the most active users (rewarding only actions which add value to the system E.g. Adding useful comments to a data service, Most Sales).
2. Sharing of added content - The re-tweet concept. If someone shares a valuable information added by a user, let the user and their peers know somehow that their information was considered valuable. Display a list of their items which have been shared in their profile or create badges or levels for being shared a certain number of times.
3. Elevate Individual items of merit - Prominently display a "best comment of the week" or similar added content, solved problem, or whatever other purpose the software is designed for.

Game Mechanics and Customer Development

The first thought after I read Scoble's blog post was to explore the idea of baking these viral concepts into software directly from the initial Customer Development process by identifying not just the pain points but the types of things that pander to the user's ego. My feeling is that unless you're either developing a social application, designing a game, or innovating in a market where the problem space is well understood you're probably trying to paint the boat before the hull is finished - aim for the absolute minimum deliverable and iterate. The whole idea probably reflects that I've been reading too many articles on Customer Development recently.

With that said, If you're trying to innovate in an existing market where the problem space is well understood, I'd hold up something like StackOverflow (which uses badges, levels etc) as a great example of how to increase 'stickiness' and reward desirable behavior with braggable moments. Question and Answer forums have been around since the dawn of the consumer internet and the problems and opportunities in this area are well understood. Adding game mechanics to this area has increased usage, attracted more knowledgeable participants, and greatly improved the quality of the content.

The types of sites I read have slowly migrated away from pure technical sites talking about monkeying around with with code towards sites discussing business, customer development, marketing, and general startup concepts. Here's a list of my favorite authors, blogs, podcasts, and forums dealing with these topics. Who else should I be listening to? Let me know in the comments.

Customer Development and Lean Startups

Steve Blank

Steve Blank is a successful startup veteran and MBA lecturer in the Haas School of business at UC Berkeley. He took the lessons he learned in successfully marketing his startups to develop the concept of Customer Development in the must read book "The Four Steps to the Epiphany". Seriously, if you're working in a startup - you need to read this book.

http://steveblank.com/

Eric Ries

Eric Ries developed the Lean Startup methodology by combining concepts from the Toyota Production System (Lean Manufacturing), Agile Software Development, the OODA loop, and Steve Blank's Customer Development model. The combination of these ideas results in a low-cost startup that is critically focused on rapidly producing a product which satisfies customer needs. There are some fantastic concepts in his writing which will inspire (Minimum Viable Product) and possibly scare the crap out of you (Continuous deployment for example).

http://www.startuplessonslearned.com/

Dave McClure

Dave McClure is a successful entrepreneur and angel investor. Dave mainly writes about using startup metrics to drive success. His "Startup Metrics for Pirates" presentation describes essential metrics any web application needs to measure to turn first-time users into obsessed fans. His refreshingly informal writing style pulls no punches, and his violent use of text color will make your eyes bleed. (The reason I have pictures next to each of these authors is mainly due to this loud advice. He's right.).

http://500hats.typepad.com/

Individual Article of Merit:

This epic saga by Recess Mobile tries to map out the entire landscape of Customer Development and Lean Startups. I can only imagine how long it took them to write this one.

Startup Marketing

Sean Ellis

Sean is a seasoned startup marketer having led several companies through to IPO. He writes about Customer Development, PR, and startup marketing.  As a quick taster, check out his Venture Hacks interviews on bringing a product to market - Part One on what to do before Product/Market Fit & Part Two on what to do after Product/Market fit.

http://startup-marketing.com/

Brant Cooper

Brant is another very experienced startup marketer who is developing a series of tools and models based around the Customer Development methodology. He recently conducted a survey into the current Customer Development landscape which can be found here: Customer Development Survey. Most recently he put together a simple model which ties Customer Development, the standard sales funnel, and Dave McClure's AARRR metrics into one cohesive whole [Available Here]. Highly recommended.

http://market-by-numbers.com/

Venture Capital and Entrepreneurship

Fred Wilson

Fred is a VC at Union Square Ventures based in New York, which funds companies such as FourSquare, Boxee, and Etsy. His blog covers a wide variety of topics in the area of entrepreneurship and business strategy, and also a little bit of venture capital concepts. He provides a very interesting critical eye on technology industry news.

http://www.avc.com/

Mark Suster

Mark is a successful British entrepreneur who has "gone over to the dark side" to become a VC. He covers the gamut of entrepreneurial topics from raising startup capital, marketing, right down to the definition of  "Entrepreneurial DNA". His fantastic interview on Mixergy was quite probably the most inspiring thing I listened to last year.

http://www.bothsidesofthetable.com/

Nivi & Naval (Venture Hacks)

Nivi and Naval have founded successful companies, and invested heavily in startups like twitter. They  cover a full range of startup essentials from securing funding from angel investors, how to choose company advisors, the psychology of a board of directors, and a fantastic selection of case studies on all of the above and more.

http://venturehacks.com/

Business Model Hacking

Alexander Osterwalder

Alexander's blog centers around the Business Model Canvas methodology which involves analyzing business models, pulling them apart into their constituent parts and then reassembling them in interesting ways. Lego for business if you will. He uses an interesting tool sheet to aid this, which I think meshes perfectly into the lean startup concept of 'pivoting'.

http://www.businessmodelalchemist.com/

Podcasts, Interviews, and Videos

Andrew Warner - Mixergy

Andrew Warner co-founded an internet business with his brother which went on to generate over thirty million dollars a year in sales. With Mixergy, Andrew has conducted some of the most inspiring and amazing interviews with entrepreneurs you're likely to find. He conducts frank and probing interviews that dig deep into the mindset of his interviewees - people who have either taken their business to dizzying heights, or failed spectacularly trying.  As well as my personal favourite interview with Mark Suster listed above, you should check out this interview with Ben Huh of "Failblog", or this amusing interview with Neil Patel of KISSMetrics. This is quite simply an amazing resource.

http://www.mixergy.com

Jason Calacanis - This Week in STartups

Jason co-founded weblogs Inc which grew to be a huge network of niche content sites, and was eventually acquired by AOL for a giant bag of money. TWiST interviews a wide range of guests in the technology sphere, and intermittent shows where listeners can ask Jason for advice. Very entertaining and informative.

http://thisweekinstartups.com/

Bob Walsh -  Startup success podcast

Bob specializes in news and advice aimed at MicroISVs at his blog 47 Hats. As opposed to the more general entrepreneurship podcasts listed above, the Startup Success Podcast digs into the more specialized issues faced by independant software vendors.

http://startuppodcast.wordpress.com/

Forums

Lean Startups Circle

A Google group centered around advice for entrepreneurs running lean startups.

http://groups.google.com/group/lean-startup-circle

Business of Software Forum

Joel Spolsky's forum covering a range of issues faced by developers trying to market software.

http://discuss.joelonsoftware.com/?biz

Hacker News

Everything under the sun relating to technology and entrepreneurship. User driven article voting, hosted by Paul Graham's startup incubator Y Combinator.

http://news.ycombinator.com/

I've tried linking my Posterous account with this blog, but there are a few things which need to be upgraded on the hosting account here before that can happen. In the meantime, if you're interested I'm providing much shorter and more regular updates at my posterous account. The general theme is based around lean startups, customer development, and various entrepreneurial topics.

http://daveconcannon.posterous.com/

Every person, all the events of your life, are there because you have drawn them there. What you choose to do with them is up to you.

Richard Bach - Illusions

A book that had a huge influence on me when growing up was Richard Bach's "Illusions".  The basic story revolves around a pilot who one day meets a self-proclaimed messiah while giving demonstration flights to people in small towns.  After forming a friendship, this stranger starts mentoring him in all the necessary skills required to be a messiah - skills he claims are there to be learned by anyone.  It's a pretty simple story, told in what my girlfriend describes as Bach's "heavy-handed parable" style. Her MA in English literature doesn't lie; one could be forgiven for dismissing it offhand, but it drove me to question the conventional career choices that most of my classmates were choosing.

Fast-forward a dozen years or so and I'm following a few interesting people on some internet nonsense called twitter. Between dumb luck and random links from creative and inspiring sources I happen to be following two particularly interesting strangers called Cody McKibben and Jun Loayza, who along with Monica O'Brien, Andrew Norcross, Carlos Miceli, Adam Baker, and intern Dariane Nabor have set up Untemplater - A site devoted to taking control of your life and career in a way that defies convention.

To kick off the site launch, they've lead with their free Untemplater manifesto which contains six real-world case studies of the untemplater lifestyle. The untemplater concept is about breaking away from conventions of living. Where entrepreneurship becomes the "alternative" to a corporate 9-to-5 job, entrepreneurship itself can take on a pattern of long hours doing grunt work while ignoring loved ones. The lifestyle design concepts from Tim Ferriss' 4-Hour Workweek are a real eye-opener, yet drive some to pursue independence at any cost, ignoring interesting opportunities that smell too much like what they have defined as 'work'.

The case studies are six genuinely interesting independent stories of personal success, with inspiring ideas to make you think about where life can take you. Some might dismiss this concept offhand, but like Illusions, it might inspire you to take your life beyond what others tell you is possible.

Argue for your limitations, and sure enough, they're yours.

Grab the Untemplater manifesto, you won't be disappointed.

There was in the sixties a man named Fritz Perls who was a gestalt therapist. Gestalt therapy derives from art history, it proposes you must understand the ‘whole’ before you can understand the details. What you have to look at is the entire culture, the entire family and community and so on. Perls proposed that in all relationships people could be either toxic or nourishing towards one another. It is not necessarily true that the same person will be toxic or nourishing in every relationship, but the combination of any two people in a relationship produces toxic or nourishing consequences. And the important thing that I can tell you is that there is a test to determine whether someone is toxic or nourishing in your relationship with them. Here is the test: You have spent some time with this person, either you have a drink or go for dinner or you go to a ball game. It doesn’t matter very much but at the end of that time you observe whether you are more energised or less energised. Whether you are tired or whether you are exhilarated. If you are more tired then you have been poisoned. If you have more energy you have been nourished. The test is almost infallible and I suggest that you use it for the rest of your life.

(From http://miltonglaser.com/pages/milton/essays/es3.html)

If you're subscribed to my RSS feed, there's a lot of noise coming through. Sorry about that.

I'm trying to get Posterous to play nicely with wordpress, but wordpress keeps trimming out any HTML. If anyone out there has a nice solution, drop me a line.

Dave

This is the second part of a review on the first year of Space Avalanche.

What have we learned?

Some lessons we think are useful, but are possibly just common sense.

1. Content matters - If it's not interesting or just doesn't vibe with their own view of the world, people won't give you the time of day. We've deliberately stuck to a schedule of one comic a week because there are only so many good ideas that you can come up with.  Our basic goal is to make people laugh out loud - tricking the brain down a side street between two seemingly unrelated concepts and then quickly pulling the veil away. I think we're doing a good job. We also believe that the art looking just right is important, and we'll leave drawing stick figures to XKCD or Abstruse goose.   We'd possibly get a larger audience by having a comic a few times a week, or every day - but I think that's more suited to your character-driven soap opera type of comic like questionable content, or something focused on a specific niche like what penny arcade is for gaming news.  This aim for quality content is aided by the fact that not only is Eoin an award-winning artist with a great sense of humor, he's a total perfectionist. He's been known to revise and re-revise some of the strips to the point where I have to sedate him but it definitely shows in the end result.
2. Promotion matters - You can have fantastic content, but if the only way you promote it is to hit "publish" you're probably limiting your audience to a few friends. This was a hard lesson for me to learn - there's some part of my brain that hasn't recovered from the idea of an utopian meritocracy where you can drop something amazing onto the internet and it'll take on a life of it's own without help.  I think you might be left waiting for a while - In general "If you build it, they will come" is just for the movies and even while deliberately doing your best to spread the word things happen slowly.
3. Measure everything - We're keeping track of just about everything of interest that a user will do on the site. What's important to us is that a viewer thinks the comic is interesting enough to follow our RSS feed, or follow us on facebook or twitter.  Some real eye-opening thing happened that we couldn't possibly measure but which pointed to the fact that we were getting something of a following such as people spontaneously deciding to translate the comic into own language. Fantastic!

So where to promote it?

Here's where I do my best to whore out Eoin's masterpieces, your mileage may vary:

1. Stumbleupon - We get a lot of traffic from Stumbleupon, but usually about a two-week interval after it's been submitted. Something will sit on the site and get a bit of nice traffic on the day it's posted, then start to fade. Two or three weeks later it'll reach some sort of critical mass on Stumbleupon and our servers start shaking. Awesome. There are guides to using stumbleupon which suggest creating lots of accounts and then up-voting your submitted links. I'm going to go right ahead to call those people asshats. The line between benevolently pushing your ideas for quiet consideratoin and spamming will be clearly marked by your conscience screaming "Nooooo... you suck!".
   • Pros: Long lasting traffic that keeps delivering
   • Cons: Flighty - the majority of visitors will stay just for that one page and then head on to the next stumble
2. Reddit - We post to the reddit comic section as it's a group of people who are usually interested in the type of geeky nonsense we come up with. They like comics, they're computer-savvy, and they'll give you very honest feedback on what they like and what they don't. I'm sure this translates into a similar audience for other sections of reddit. That said, my latest posts have been buried (probably because I'm posting about Space Avalanche every week), but luckily it's achieved a following from some nice people who post it to reddit on their own.
   • Pros: A 'targeted' audience who will give you great feedback, and probably look through your archives and click a few ads.
   • Cons: The traffic doesn't last long, but then again you should be getting subscribers to your RSS feed etc as a true sign of interest.
3. Digg - Digg doesn't really love us too much. We got on the front page one time, but that was completely attributable to a very nice power-digger posting our comic. If you post something as some random Joe Soap, it's pretty much pot luck. If someone with a better reputation re-posts the exact same link? -  you'll get noticed. Maybe the lesson is that you can't expect to turn up to a community you don't interact with and expect them to lavish praise on you?
   • Pros: All the traffic in the world
   • Cons: None of it is for you, unless you've spent time getting into the gang
4. Other (surprising) sites - There are plenty of niche sites in non-English speaking countries that deliver plenty of adoring eyeballs. For example there's a Spanish-language version of reddit / digg called Meneame.net, and a Polish version called Wykop.pl. There's got to be dozens of similar sites out there - We're lucky in that we have a lot of comics that depend solely on the artwork with no text involved so there's universal appeal. We also have some really fantastic fans who occasionally translate comics for us.
5. Facebook / Twitter - We promote the latest comics and have a bit of a chat with people who like the comic on both twitter and facebook, and also try to post any funny stuff we find on the web. It's great to put a more personal face on the people who like the comic and it's a real buzz to get see people recommending various comics to their friends or when they give us some nice feedback. (I'm using 'us' as more of a vicarious version of 'Eoin' as let's be honest - he's doing the real work, I'm mostly just manning the boiler room).

The next post on this will recount how we're making several million dollars a month from all of this*, a little bit on the size of our traffic, some mistakes we've made, and some amazing people that we want to thank for their support.

* = Seriously, buy some t-shirts. I've been eating nothing but baked beans for three months.